In Alaska, the year was more mixed for BP. While BP Alaska leaders are celebrating the success of stemming production decline from the aging Prudhoe Bay oil field despite belt-tightening in the industry, the company’s global executives on Feb. 6 celebrated the announcement of a $3.4 billion profit in 2017. The $3.4 billion in earnings last year comes after the London-based oil super major managed to net just $115 million in 2016. The entire industry was boosted by a gradual return to oil prices of about $70 per barrel by the end of the year, but the fact that BP’s settlement payments related to the 2010 Deepwater Horizon oil spill have started to shrink also helped the company. It paid out $6.9 billion in spill payments in 2016 and $5.2 billion in 2017, according to the fourth quarter earnings report released Feb. 6. “2017 was one of the strongest years in BP’s recent memory,” CEO Bob Dudley said in a formal statement. “We delivered operationally and financially, with very strong earnings in the downstream; upstream production was up 12 percent; and our finances rebalanced. And we did all this while maintaining safe and reliable operations.” However, the company netted just $27 million in the fourth quarter after a $1.7 billion profit in the third quarter. That was primarily due to non-operating expenses accounted for in the quarter, according to the report.
Oil dominates 2018 construction spending forecast. Construction spending in Alaska this year will be around $6.6 billion, up 4% from 2017. But that overall increase is due just to a recovery in spending by the petroleum industry, which is expected to be up about 15%, to nearly $2.6 billion. Without petroleum, overall construction spending in 2018 is likely to be down about 2%, to $4.1 billion. But even though a number of sectors will spend less, some kinds of spending—particularly for national defense—will be up. These estimates are from the newly released 2018 construction forecast, prepared by Scott Goldsmith, professor emeritus of economics at ISER, for the Associated General Contractors of Alaska and the Construction Industry Progress Fund. He has made these forecasts of construction spending every year since 2004.
Oil cruises from Texas to the Emirates. The United Arab Emirates, a model Persian Gulf petro-state where endless billions from crude exports feed a giant sovereign wealth fund, isn’t the most obvious customer for Texan oil. Yet, in a trade that illustrates how the rise of the American shale industry is upending energy markets across the globe, the U.A.E. bought oil directly from the U.S. in December, according to data from the federal government. A tanker sailed from Houston and arrived in the Persian Gulf last month. The cargo of American condensate, a type of very light crude oil, was preferred to regional grades because its superior quality made more suitable for the U.A. E’s processing plants, a person with knowledge of the matter said, asking not to be identified discussing a commercially sensitive matter. “As a member of OPEC and a large crude producer, I would imagine they would be very self-sufficient in their own crude supply,” said Andy Lipow, president of Lipow Oil Associates LLC. The purchases of U.S. oil aren’t likely to continue, given the U.A.E.’s own supply, Lipow said.
Judge orders EPA to act now. A federal judge is ordering the Environmental Protection Agency to take steps that could lead to sanctioning a coal-fired power plant in Pennsylvania for increasing air pollution in Connecticut. Judge Warren Eginton for the district court in Connecticut is giving the EPA 60 days to make a decision based on the state’s request for the agency to act under the Clean Air Act, according to a Wednesday decision. The EPA missed the deadline for responding to the state’s formal claims to petition for relief as a downwind state. Connecticut argued in its petition that the power plant has harmed its ability to meet ozone regulations while raising harmful air pollution in the state. The petition has been lingering for nearly two years, which Eginton wrote “is clearly at odds with period of time that Congress deemed appropriate” for the EPA to review a Clean Air Act petition.
BP bounces back from 2016 with $3.4B profit in 2017
Alaska Journal of Commerce, Elwood Brehmer, February 7, 2018
Alaska’s 2018 Construction Spending Forecast
Alaskanomics, February 7, 2018
Oil World Turns Upside Down as U.S. Sells Oil in Middle East
Bloomberg Markets, Sheela Tobben and Wael Mahdi, February 7, 2018
Judge’s order could force Trump’s EPA to sanction coal plant
Washington Examiner, John Siciliano, February 7, 2018